You can apply for ABSD remission later, provided you sell your flat within six months of buying the condo. This can be problematic. For Singapore citizens, the ABSD would be 12 per cent of your condo price or value whichever is higher , so you need quite a lot in cash or CPF to pay for this initially. Later, there is a risk that something can go wrong in selling your flat, and cause you to miss the deadline for ABSD remission.
Do also note that you will have to pay a resale levy if you are selling a subsidised flat even resale flats bought with a CPF housing grant and then buy a new EC.
This caps your monthly repayments to 60 per cent of your monthly income, inclusive of all other loans car loans, personal loans, etc. This caps your monthly loan repayments to 30 per cent of your monthly income, excluding other loans. For ECs, you need to meet both requirements.
The same would apply to ECs that are not yet fully privatised after 10 years, anything goes; sell it to a foreigner or even a company if you like. As a general rule of thumb, a leasehold private condo will cost about 20 per cent more than an EC of similar size and location.
As an aside, this may partly be due to location. ECs tend to be further away from MRT stations, due to the plots the government earmarks for them. The restrictions around the EC: Executive condominiums were designed to serve as homes rather than investment options. To this end, anyone who buys an EC has to live in it for at least five years before it can be sold on. Even after half a decade has passed, you are restricted in that you can only sell the flat to Singapore citizens or Singapore permanent residents.
Subsequently, HDB bars foreigners from buying executive condominiums for another five years. After a full decade has passed the executive condominium effectively transforms into a private condominium, and it may as such be sold to anyone on the free market.
To contextualise the measures a little, executive condominiums are state-subsidised and meant to enhance home-ownership for Singaporeans, not the investment opportunities for real estate moguls. As such, you will not be able to profit by buying a flat from the government and then selling it on when market prices surge. One major factor enticing first time buyers to opt for an EC, rather than a private one is its relatively more attractive price tag.
While it has differed considerably over time, executive condominiums can be as much as 25 per cent lower. Add to this the option to get a grant from HDB, and one starts to see why so many first timers go for an EC before they upgrade to a private condominium. As noted before, after 10 years the executive condominium effectively turns into a private condominium. Seeing the lower price at which executive condominiums are bought, sitting out the 10 years makes for potential of substantive capital appreciation.
While the strings attached make it impossible for buyers to try and make a quick buck by buying and subsequently rapidly selling the flat, there is room for buyers to take advantage of long-term property appreciation. Boosted by a public-to-private property transition after 10 years, the EC generally sees relatively more appreciation than other private property, such a private condominiums.
Unless you wish to sell your condo within a decade of buying it, the executive variant poises as a strong contestant, especially weighing up its attractive price and subsequent large potential for long-term capital gains.
Still, there remains one last caveat: while private condominiums tend to be freehold, executive condominiums generally come with a 99 year lease. As EC is for own occupation, achieving a good resale capital appreciation after privatization is good for investment. Save my name, email, and website in this browser for the next time I comment.
Sign in Join. Sign in. Log into your account. Sign up. Password recovery. Forgot your password? Get help. Create an account. The New Savvy. Tips to investing in your 20s. Life Insurance for Single Mothers. How to Surprise Your Kids on their Birthday. Are you having trouble recruiting developers for your project? Take a…. How to make a nomination for your life insurance in Singapore. MSR is implemented to prevent EC buyers from taking on loans that may put them in risky financial situations.
Benefits of owning an EC, and why it is better to own an EC Executive condominium is designed and built by private developers, just like a private condominium. This is sold to private developers at a lower price, which translates into cheaper selling price to the EC buyer. Please enter your comment! Please enter your name here.
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